performance measurement

Question 0

what are responsibility centers

Answer 0

cost centers
profit centers
investment centers

Question 1

organizational architecture for performance measurement

Answer 1

decision right
performance measures
rewards

Question 2

how to calculate ROI (evaluating investment centers)

Answer 2

segment margin / divisional operating assets

Question 3

what’s residual income

Answer 3

segment margin - required rerun on operating assets

Question 4

what are relevant costs

Answer 4

expected future costs that differ among alternatives

Question 5

what are relevant revenues

Answer 5

expected future revenues that differ among alternatives

Question 6

what are opportunity costs

Answer 6

net benefit foregone by not choosing the best available alternative

Question 7

what are sunk costs

Answer 7

irrelevant investments

Question 8

when is the decision smart

Answer 8

it provides higher net benefits than the best alternative

Question 9

what is the price for special offers

Answer 9

above relevant costs

Question 10

if you have capacity constraints, give priority to alternative uses of capacity baed on….

Answer 10

contribution margin per unit of constraint